Prudential Bond 32

dunstonh

contacted the Pru and asked about transfer to Sipp and they said no problem .Strange thing though is I have to deal with Legal And General ?

Be wary of what Pru say.  You may get different answers depending on whether you speak to their admin team or their sales team.    I have a client on the go at the moment where Pru said they would charge him £3000 for taking the retirement guarantee on an existing plan.  That was one of their sales reps.  Yet there is no cost if it is done directly with the admin team.

Pru do not insist you do a transaction with a specific insurer unless it is an annuity.

thebullsback

just to be clear my current sipp is with AJ Bell and the Pru have said that if I understand it correctly that they no longer do Annuity's and Legal and General will do that part at no cost to me.

xylophone

I am still mystified.

You have been told by Prudential

Based on our calculations the cost of providing your GMP is £68216 As your fund Excluding the redress is not large enough to provide this prudential will meet the shortfall and your redress of £27806 is available to provide additional benefits
Fund available after GMP
figures below not guaranteed and may change 
The amount of £27806 can be used in one of the following ways 
A-Buy an Annuity 
B-Cash Lump sum -25% tax free
C-Open Market. Open market value estimated at £36013 This is based on Prudential paying a Tax free lump sum of £16097 and the GMP being provided by the reciving insurer. Please note in this scenario Prudential will not pay shortfall in cost of providing GMP
D-Move into Drawdown
E-Transfer out .AS your GMP has been secured you could look to transfer out the fund after GMP

Are you choosing to take the GMP  and to transfer out the  redress of £27806 ?

Is the Pru saying that  it will provide the GMP of  £2313 per annum (pay you £192.75 a month)
but L&G will be responsible for the transfer of the redress policy to your SIPP?

thebullsback

There is paperwork Due soon when I have it I will update .
At this point it is my intention to take GMP pension and transfer all of redress into my sipp. 
From memory Pru rep told me they don't do annuity's anymore  and L and G will handle everything. The paperwork I'm waiting for is apparently from L and G .

dunstonh

L&G will provide an annuity that matches the GMP.  Pru will pay L&G the amount that achieves that annuity.   Quite a lot operate that way now.  L&G are only the annuity provider used by L&G on a commercial basis. In my experience, it is not free as there is a commission built into annuity rate and disclosed.   However, the annuity rate is after commission, not before.

. If I transfer full £27806 into Sipp will i qualify for any addition tax from Government?

No.  Its already in a pension and transferring does not take it out of the pension.

xylophone

Both policies (which were formerly with Prudential) are now administered by L&G?

thebullsback

Does anyone want to try and explain option C to me.....Curious 

elouise01582

I haven't been involved with a GMP case for a while (2013) however option C could apply if say you were in serious ill health and the GMP income could be met with the lower amount i.e. the £36,013.  This equates to an annuity rate of 6.42% and GMP income usually has to include a 50% spouse's pension. Doesn't look likely although sometimes some of the enhanced annuity rate providers could do it (back in the day).  They have to offer you the open market option even if it is unlikely any pension provider would be able to provide you with cover for the GMP liability.  Hope this helps.

thebullsback

many Thanks to you All for taking the time and making the Effort to answer my questions and Explain things.
I will simply take GMP and transfer redress into sipp .

TVAS

I would send the offer to FOS. I am confused and I do not like the offer not being guaranteed. If you have reached the retirement age should the funds not be in cash so the value does not drop? It does look like the tax free cash is higher taking it from the Section 32 plan because the figure is based on service and salary of the previous employer scheme rather than now which is 25%. The fund after GMP is secured is this 27k i.e. less than 30k i.e. one does not need an IFA? I would let the Pru pay and therefore secure the GMP no receiving scheme will accept GMP. Also GMP has not been equalised from 1990 -1997 so you may receive an additional payment from your old employer to the Section 32 Pru Bond within the next 2 years.